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DATE News (chronologically)
06/15/12
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"Phil Parsons and HP Racing Fined in N.C. Workmen’s Comp case"
The North Carolina Industrial Commission has levied fines against Phil Parsons and Randy Humphrey, owners of HP Racing, now Phil Parsons Racing, for failing to provide workers’ compensation insurance for most of the 2011 NASCAR Sprint Cup Series season. Parsons, who also works as a television analyst for SPEED, and Humphrey were also ordered to pay medical bills and wages to an HP Racing employee who suffered a work related injury last summer.

The North Carolina Industrial Commission, the state agency that handles disputed workers’ compensation claims when people get hurt on the job, determined that Parsons and Humphrey failed to have the proper workers’ compensation insurance from February 11, 2011 – October 27, 2011. Workers’ compensation insurance was obtained by HP Racing just five days before the claim was initially set to be heard before the Deputy Commissioner of the Industrial Commission. The Commission also determined that the HP Racing employee had sustained a compensable injury by accident during the non-insured period. The North Carolina Assistant Attorney General’s Office, Fraud Unit was also involved in the claim against HP Racing, Parsons and Humphrey.

HP Racing competed in the NASCAR Sprint Cup Series in 2011, entering driver Michael McDowell in 32 events and earning over $2.4 million in race winnings. The team changed names in 2012, becoming Phil Parsons Racing, a joint effort between Parsons, Whitney Motorsports and new partner Mike Curb, owner of Curb Records. Humphrey formed his own team for 2012, joining forces with Mark Smith to form Humphrey Smith Racing, fielding cars in the NASCAR Sprint Cup Series for driver Mike Bliss.

The Workers’ Compensation Act requires any employer who employs three or more employees to provide workers’ compensation coverage. The North Carolina Industrial Commission has begun cracking down on business owners like Parsons and Humphrey, who fail to provide proper workers’ compensation coverage. Roughly 100 employers who failed to provide workers' compensation insurance to their employees were recently told by the Commission to pay as ordered or face the possibility of jail.

The injured HP Racing employee is still awaiting approval from Parsons and Humphrey for necessary medical treatment, as well as payment of his wages and related medical expenses as ordered by the Industrial Commission. The employee has been unable to work since his accident last summer - and is ineligible for unemployment compensation - due to his injury and physician’s orders preventing him from returning to work or seeking employment. Motorsport.com

There are a number of things egregious about this case:

    (1)  One of the owners of HP Racing tried to claim that NASCAR's carrier was the insurer (in the attachment)

    (2)  Phil Parsons and the other team owner stated they did not know that the team was required to have Workers Comp insurance

    (3)  HP Racing offered no health insurance

    (4)  The day before the North Carolina Industrial Commission publicly filed this case (May 22), Phil Parsons announced a sponsorship deal with Presbyterian Healthcare:  http://www.presbyterian.org/site/news_releases/20120521_NASCARMcDowell_p/

Lawsuit

I.C. NOS. X52104 & PH-2796, MARK KONZER, Employee, Plaintiff v. HP RACING, LLC, Employer, NONINSURED, and RANDY HUMPHREY, Individually, and PHIL PARSONS, Individually, Defendants.  OPINION AND AWARD by ADRIAN A. PHILLIPS, Deputy Commissioner, N.C. Industrial Commission.  Filed 22 May 2012.

This matter was heard before the Undersigned on December 5, 2011 in Concord, North Carolina.  Thereafter, the parties were allowed 60 days to submit deposition testimony.  The parties elected not to obtain any depositions.  Upon receipt of the parties’ respective briefs, the record duly closed on March 12, 2012.  This matter now stands ready for decision by the Undersigned.
A P P E A R A N C E S
Plaintiff: Collum & Perry, PLLC, Mooresville, North Carolina; Stacy L. Williams, Appearing.

Defendant: The Law Office of Java Warren, Charlotte, North Carolina; Richard W. Turner, Jr., Appearing.

State: North Carolina Department of Justice; Raleigh, North Carolina, Assistant Attorney General, Marc X. Sneed, appearing.

* * * * * * * * * * *
The Undersigned hereby finds as fact and concludes as matters of law the following, which were entered into by the parties as:
STIPULATIONS
1. All parties are properly before the Commission and the Industrial Commission has jurisdiction over the parties and the subject matter.
2. All parties have been correctly designated and there is no question as to the misjoinder or nonjoinder of parties.
3. It is stipulated that Defendant, HP Racing, LLC, did not have insurance in effect
on the alleged date of injury, July 2, 2011.
4. It is stipulated that an employee-employer relationship existed between the parties at all relevant times.
5. It is stipulated that the parties are subject to and bound by the provisions of the North Carolina Workers’ Compensation Act and were subject to and bound by the provisions of the Act on the date of the injury.
* * * * * * * * * * *
The following documentary evidence was received as:
EXHIBITS
1. Stip. Ex. #1:  IC Forms, Medical Records, Plaintiff’s Paystubs and Personnel File, Discovery, Photos and Medical Bills
2. State’s Ex. #1:  NCIC Database Printout
3. State’s Ex. #2:  ESC Records
4. State’s Ex. #4:  Secretary of State Records
* * * * * * * * * * *
ISSUES
1. Whether Plaintiff was injured in the course and scope of employment, and if so, to what benefits is Plaintiff entitled?
2. Whether any penalties should be assessed for Defendant’s failure to provide workers’ compensation insurance as required by the Act?
3. What is Plaintiff’s average weekly wage?
4. Whether Defendants unreasonably defended this action?
* * * * * * * * * * *
Based upon the foregoing Stipulations and when viewing the entire record by a preponderance of the evidence, the Undersigned makes the following:
FINDINGS OF FACT
1. At the time of hearing, Plaintiff was forty (40) years old with a date of birth of August 6, 1970.  Plaintiff’s prior employment included mechanic work and truck driving.  Plaintiff has been in the racing business for ten years.
2. Defendant, HP Racing, LLC, is in the business of setting up race cars to compete in race car driving.  Randy Humphrey and Phil Parsons are owners of HP Racing, LLC.
3. Plaintiff interviewed with Jeanie Evans and spoke with Mr. Humphrey prior to beginning his employment with Defendant-Employer.  Plaintiff was employed as Crew Member.  Plaintiff worked ten to fifteen hours per day.  Plaintiff earned $850.00 per week.  Taxes were deducted.
4. On July 2, 2011, Plaintiff was helping to set up a car for inspection.  Plaintiff realized that a window was not working properly on one of the cars.  Plaintiff ran to retrieve a racecar part.  Two race car fans stepped in front of Plaintiff, causing him to sidestep.  Plaintiff stepped into a grate drain and fell injuring his left ankle.
5. Plaintiff informed his immediate supervisor, Ken Evans, and other crew members that he had injured himself while running to retrieve the part.  Plaintiff assisted in changing tires for the remainder of the day.  Other crew member employees assisted Plaintiff in performing his duties.  Jean, Ken Evans, Gary and Chuck Daye were aware that Plaintiff had injured himself.
6. Randy Humphrey testified that NASCAR covers all workers that are injured on the track rather than the Employer.  Humphrey testified that he didn’t realize that he needed workers’ compensation insurance.  Humphrey did admit that he would have been the person with the ultimate responsibility in purchasing workers’ compensation insurance.  Humphrey testified that the business opened on January 28, 2011, but that there no employees until two weeks later.
7. Mr. Charles Daye, Jr., testified that he was aware that Plaintiff ran off for the window part on July 2, 2011.  Daye testified that Plaintiff came back and was mad because he had fallen.  Daye remembered that Plaintiff was limping when he came back with the window.
8. Mr. Kenneth Evans testified that the first time he learned of Plaintiff’s injuries was when Plaintiff called him on July 3, 2011.  Plaintiff reported to Evans that his ankle was sore and that Plaintiff was in route to the hospital.  Mr. Evans instructed Plaintiff to contact NASCAR in that Plaintiff was hurt on the track.
9. Mr. Gary Marshall testified that he was not aware that Plaintiff had sustained a serious injury until he heard about it again on the following Monday.  Marshall did remember that Plaintiff sustained an injury on July 2, 2011.
10. The Undersigned finds that based upon the foregoing collective testimony and when viewing the entire record by a preponderance of the evidence, Plaintiff sustained a compensable injury by accident on July 2, 2011.
11. Mr. Philip Parsons testified that he is Co-owner of Defendant-Employer, HP Racing, LLC.  Mr. Parsons testified that Plaintiff is a salaried employee earning $850.00 per week.  Mr. Parsons testified that he would not be involved in the purchase of workers’ compensation insurance but it would be within his power to purchase it.
12. Mr. Parson testified that Defendant-Employer did not have workers’ compensation insurance on the date of Plaintiff’s injury, July 2, 2011.  Defendant-Employer purchased workers’ compensation insurance on October 28, 2011.
13. During the evening and night as Plaintiff traveled home from Daytona to North Carolina, Plaintiff’s thigh, knee, leg and ankle began to swell.  Plaintiff called Ms. Evans to find out what to do.
14. Plaintiff presented to Lake Norman Regional Medical Center the day after the injury with complaints of left ankle pain.  Plaintiff described an inversion type injury to his left ankle that occurred at the Daytona 500 race track.  His chief complaints were left foot, ankle and lower leg pain.
15. Plaintiff was diagnosed with a ligamentous sprain to the left ankle.  X-rays taken at the hospital were negative for fracture, however, no further diagnostic studies were completed that day.  The treating physician instructed Plaintiff to follow-up with an orthopedist within three days.
16. Plaintiff was unable to follow up as he did not have health insurance.  Plaintiff called Randy Humphrey to inquire about workers’ compensation insurance.  Mr. Humphrey informed Plaintiff that it was NASCAR’s responsibility to insure Plaintiff for work-related injuries.
17. On August 11, 2011, Plaintiff began treating with Dr. William VanNess.  Dr. VanNess is a physiatrist with The Pain and Rehab Institute in Mooresville, North Carolina.  Dr. VanNess noted that Plaintiff appeared to be suffering from a left ankle sprain from a work- related injury, gait abnormality secondary to above, left knee pain that appears to be to be mechanical and myofascial in nature with a component of SI joint dysfunction secondary to above and unrelated diagnoses of high cholesterol.
18. Dr. VanNess recommended that Plaintiff begin physical therapy twice a week for four weeks.  Plaintiff was instructed to continue to apply ice and elevation of the left ankle as well as utilization of an ankle brace and crutches as needed.  Plaintiff was instructed to follow-up in four weeks.  Dr. VanNess also started steroid injections at the injury site.
19. Plaintiff returned for a follow up visit with Dr. VanNess on September 8, 2011.  Dr. Van Ness noted that Plaintiff was improving somewhat but was continuing to experience much pain and gait disturbance.  Dr. VanNess recommended Plaintiff continue physical therapy twice a week for three weeks and if the pain continued, an MRI would be recommended at the next visit.
20. On September 29, 2011, Plaintiff returned for a follow up visit with Dr. VanNess.  Dr. VanNess noted that although Plaintiff was still in pain, Plaintiff’s left ankle was improving.  Dr. VanNess further noted that Plaintiff was now experiencing significant pain in his left knee, left hip and lower back as a result of the way he was required to walk because of the ankle injury.
21. Dr. VanNess assessed that Plaintiff was suffering from a left syndesmotic sprain secondary to a work-related injury.  He further noted gait abnormality, left thigh/groin pain and low back pain.  Dr. VanNess recommended Plaintiff follow up in four weeks.  Dr. Van Ness scheduled Plaintiff for an MRI.
22. On October 4, 2011, Plaintiff underwent an MRI.  The results of the MRI revealed a small tibiotalor effusion as well as an area of subchondral talar edema.  Dr. VanNess noted that he suspected that Plaintiff was suffering from a left syndesmotic sprain.
23. Dr. VanNess thought physical therapy should continue and Plaintiff should be seen by a podiatrist to purchase a CAM walker boot.  Dr. VanNess noted that Plaintiff would possibly need surgical intervention.
24. Plaintiff continues to treat with Dr. VanNess.
25. Plaintiff has been written out of work by his treating physician since the date of his injury, July 2, 2011.  Plaintiff has not been released to return to work in any capacity as of the date of hearing.
26. Based upon the collective testimony and when viewing the entire record by a preponderance of the evidence, the Undersigned finds that Defendant-Employer unreasonably defended this matter.
* * * * * * * * * * *
Based upon the foregoing Stipulations and Findings of Fact, and when viewing the entire record by a preponderance of the evidence the Undersigned makes the following additional:
CONCLUSIONS OF LAW
1. As stipulated, all parties are properly before the Industrial Commission.  As stipulated, all parties are subject to and bound by the provisions of the North Carolina Workers’ Compensation Act.  As stipulated, the Industrial Commission has jurisdiction over the parties and the subject matter of this case.  N.C. Gen. Stat. §97-2.
2. On July 2, 2011, Plaintiff sustained a compensable injury by accident to his left ankle.  N.C. Gen. Stat. §97-2(6).
3. As stipulated, HP Racing, LLC, was the duly-qualified Employer at the time of the accident and is subject to the North Carolina Workers’ Compensation Act, having employed the requisite number of employees to be bound under the provisions of said Act at the time of the incident.  N.C. Gen. Stat. §97-2.
4. As stipulated, an employee-employer relationship existed between Plaintiff and said Defendant-Employer, HP Racing, LLC, at the time of his injury and said Defendant-Employer was uninsured at that time.  N.C. Gen. Stat. §97-2.
5. Plaintiff’s average weekly wage was $850.00, yielding a compensation rate of $566.69 as calculated under the fifth method of calculation.  N.C. Gen. Stat. §97-2(5).
6. As a result of Plaintiff’s compensable injury by accident on July 2, 2001, Plaintiff was incapable of work in any employment from July 2, 2011 and continuing.  Russell v. Lowes Product Distribution, 108 N.C. App. 762, 425 S.E.2d 454 (1993).  Plaintiff is entitled to have Defendant-Employer, HP Racing, LLC, pay to Plaintiff, temporary total disability benefits at the rate of $566.69 from July 2, 2001 and continuing until Plaintiff returns to suitable employment.  N.C. Gen. Stat. §97-29.
7. As a result of Plaintiff’s compensable injury by accident of July 2, 2011, Plaintiff is entitled to have Defendant-Employer, HP Racing, LLC, pay to Plaintiff, a permanent partial impairment rating, when and if, Plaintiff’s treating physician assigns one.  N.C. Gen. Stat. §97-31.
8. As a result of his compensable injury by accident, Plaintiff is entitled to have Defendant-Employer, HP Racing, LLC, pay for all related medical treatment, incurred or to be incurred, in accordance with the Industrial Commission’s medical fee schedule.  Plaintiff is entitled to have Defendant-Employer, HP Racing, LLC, to continue to provide medical treatment as recommended by Dr. William C. VanNess III including surgery, therapy and medications as may reasonably be required to effect a cure, provide relief or lessen Plaintiff’s period of disability.  N.C. Gen. Stat. §§97-2(19); 97-25.
9. Any employer required to secure payment of compensation who refuses and neglects to secure such compensation shall be punished by a penalty of one dollar ($1.00) for each employee, but not less than fifty dollars ($50.00) nor more than one hundred dollars ($100.00) for each day of such refusal or neglect, and until the same ceases pursuant to N.C. Gen. Stat. §97-94(b).  In the present case, Defendant-Employer, HP Racing, LLC, neglected or refused to insure its liability or otherwise comply with N.C. Gen. Stat. §97-93 beginning on February 11, 2011 to October 27, 2011, for a period of 247 days.  Defendant-Employer, HP Racing, LLC, shall be punished by a penalty of fifty dollars ($50) per day for 247 days, which totals $12,350.00.  N.C. Gen Stat. §§97-93, 97-94(b).
10. Anyone with the ability and authority to bring their business into compliance with N.C. Gen. Stat. §97-93 who fails to do so, may be assessed a penalty equal to one hundred percent of the amount of compensation due Defendant’s employees injured during the time his business failed to comply with N.C. Gen. Stat. §97-93 as set out in N.C. Gen. Stat. §97-94(d).  Here, Defendants, Randy Humphrey and Phil Parsons, had the ability and authority keep the Employer in compliance with N.C. Gen. Stat. §97-93, but neglected to do so.  The Commission may therefore assess a civil penalty against Mr. Humphrey and Phil Parsons in an amount up to one hundred percent (100%) of any compensation due to Plaintiff which totals at least $25,257.37 ($25,257.37 in TTD + $? in PPD + $?  in medical compensation = $25,257.37).  N.C. Gen. Stat. §97-94(d).
11. Plaintiff’s attorney is entitled to reasonable attorney’s fees as the Undersigned has determined that this action has been defended without reasonable ground.  N.C. Gen. Stat. §97-88.1.
* * * * * * * * * * *
Based on the foregoing Stipulations, Findings of Fact and Conclusions of Law, the Undersigned enters into the following:
A W A R D
1. Subject to an attorney’s fee hereinafter allowed, Defendant-Employer, HP Racing, LLC, shall pay temporary total disability compensation benefits to Plaintiff at the rate of $566.69 per week beginning July 2, 2011 and continuing until Plaintiff returns to suitable employment.
2. Defendant-Employer, HP Racing, LLC, shall pay to Plaintiff a permanent partial impairment rating when and if, Plaintiff’s treating physician assigns one.
3. Defendant-Employer, HP Racing, LLC, shall pay for all related medical treatment, incurred or to be incurred, in accordance with the Industrial Commission’s medical fee schedule.  Defendant-Employer, HP Racing, shall continue to provide medical treatment as recommended by Dr. William C. VanNess III including surgery, therapy and medications as may reasonably be required to effect a cure, provide relief or lessen Plaintiff’s period of disability.
4. An attorney’s fee of 25% is awarded to Plaintiff’s counsel.  Defendant-Employer, HP Racing LLC, shall deduct the fee awarded and pay the same directly to counsel.
5. An additional twenty-five percent (25%) attorney’s fee is hereby awarded for unreasonable denial of this claim.
6. Defendant-Employer, HP Racing, LLC, is ordered to pay the State of North Carolina penalties for the sum of $12,350.00 which represents $50.00 per day from February 22, 2011 to October 27, 2011 that Defendant-Employer neglected to secure workers’ compensation coverage in accordance with the Workers’ Compensation Act.
7. An additional penalty of 100% of the amount of the compensation due to Plaintiff in this matter, is assessed against Randy Humphrey  and Phil Parsons, individually, for failing to comply with N.C. Gen. Stat. §97-93.  A check in the amount of $25,257.37 (TTD of $25,257.37(as of May 9, 2012) + PPD ? + Meds ? = $25,257.37) shall be made payable to the North Carolina Industrial Commission and sent directly to Assistant Attorney General, Sneed, at the Fraud Unit of the North Carolina Industrial Commission.
8. Defendant-Employer shall pay all costs.
This matter is hereby ORDERED REMOVED from the active hearing docket.

  S/ 
ADRIAN A. PHILLIPS
DEPUTY COMMISSIONER

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